Traditionally your parents would be banking with one of the UK’s top 5 Banks (HSBC, Barclays, Lloyds, RBS and Santander). Chances are they set you up with a bank account when you were younger, and as you have grown up you have just so happened to stick with the same bank for convenience and familiarity. From this tradition has grown what is known as bank loyalty. Previously banks could get away with offering little incentives to keep you. Now however with the bloom of Fintech start-ups, the future isn’t looking so bright for traditional banks.
There is no doubt that the new millennials are much more open to taking risks. Combine this with the huge development and increase of Fintech companies comes a rocky future for traditional banks. 73% of millennials expressed excitement for new financial services provided by Google, Amazon, Apple, PayPal and Square (1). This statement is further supported by the already changing financial world. Challenger banks’ profits have increased by £194 million, in comparison to a £5.6 billion loss from the big 5 UK banks (2).
Joining a Fintech challenger bank like Atom allows your data to be analysed giving you next month’s statement rather than last month statement like your traditional banks. Mondo, are creating a feature which makes splitting the restaurant bill less of a change swapping I-owe-you process. Challenger bank analysts are also looking at developing mortgages that measure your income over the year and adapt repayments accordingly (3).
Could mobile only banks, which analyse your data, such as Starling, Atom and WeBank become the new `it` banks for the millennials?
Food for thought:
Some banks have brought out new Fintech start-ups in a bid to develop along with the times.
But is a new trend being set – Fintech start-ups buying banks!? (4)
Definitely a space to watch.